Tax demands set aside, fresh assessment ordered after objections allowed. Refund granted, interest accrued. Ongoing interest dispute deferred.

The Court allowed the Petitioner's objections against tax demands, leading to the setting aside of assessment orders and a direction for fresh assessment. When the tax authority failed to initiate assessment within the prescribed time, the demands became unenforceable. The Court directed the refund of the pre-deposit amount, with interest calculated from the date of the refund application. An ongoing dispute over interest calculation for a specific period was deferred pending a Supreme Court decision. The Court also ordered the removal of the demand from the tax portal without imposing costs on the Petitioner.

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Issues:
Refusal to refund pre-deposit amount along with interest for specific tax periods.

Analysis:
The Petitioner, registered under the DVAT Act and CST Act, challenged demands raised for the tax periods of March 2010-11 and 2011-12, amounting to substantial sums including tax, interest, and penalties. The Petitioner objected to these orders under Section 74 of the DVAT Act, leading to a pre-deposit requirement of Rs. 2 lacs set by the Objection Hearing Authority (OHA) for appeal consideration. After complying with the pre-deposit condition, the objections were allowed, and the assessment orders were set aside on 4th July 2017, with a direction for fresh assessment by the Value Added Tax Officer (VATO).

Subsequently, the VATO failed to initiate assessment or pass any order despite multiple appearances by the Petitioner's authorized representative with necessary documents. As the one-year limitation period for fresh assessment lapsed on 4th July 2018, rendering the demands unenforceable, the Petitioner sought a refund of the pre-deposit through Form DVAT-21 filed on 15th February 2019, leading to the present petition.

Referring to a previous court order and a Supreme Court dismissal of an appeal by the Respondents, the Court affirmed the Petitioner's entitlement to the refund of Rs. 2 lacs, directing its immediate release by 31st May 2019. Regarding the interest on the refunded amount, a dispute arose between the parties. The Petitioner cited a judgment for interest accrual from 4th July 2018, while the Respondents argued for interest calculation from the filing date of DVAT-21 on 15th February 2019, supported by a stay order on the previous judgment pending appeal.

The Court resolved the interest issue by directing the payment of simple interest at 6% per annum on the Rs. 2 lacs from 15th February 2019 until the actual refund date. However, interest calculation for the period between 4th July 2018 and 15th February 2019 was deferred pending the Supreme Court's decision on the appeal related to the interest matter. Additionally, the Court ordered the removal of the demand raised against the Petitioner from the DVAT portal of the Respondents, concluding the petition without imposing any costs.

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